Intel Joins in Venture to Send Films Via Web

Chip maker Intel Corp. and an entertainment firm co-founded by actor Morgan Freeman said Wednesday that they had formed a digital entertainment company aimed at delivering first-run movies to consumers via the Internet.

The partnership, called ClickStar Inc., will enable users to download films legally from the Web for a fee, before they are released on DVD and possibly while they are still in theaters.

“Our goal is to deliver first-run premium entertainment to film fans around the world and to make film easier to buy than to pirate,” Oscar winner Freeman said at the annual Allen & Co. media conference at this resort city.

Santa Clara, Calif.-based Intel would not disclose the size of its investment with Revelations Entertainment, the firm headed by Freeman and producer Lori McCreary.

Intel, the world’s largest maker of computer chips, occasionally invests in technology start-ups. ClickStar fits in with Chief Executive Paul Otellini’s vision of deriving more of Intel’s revenue from digital home entertainment, in this case chips in PCs and other devices that can play back video content.

Freeman and McCreary see ClickStar as a potential boon to independent filmmakers.

“There are hundreds of great films that don’t get distribution,” McCreary said, noting that she and Freeman believe they can help filmmakers get financing for movies costing $20 million to $40 million by providing an online distribution outlet.

“We need to create a market right now,” she said.

The first movie will be made available in 2006, with 10 to 15 online by the end of that year, she and Freeman said.

But what could work in the indie world may have less success in winning support from mainstream Hollywood, even if one of ClickStar’s purposes is to deter piracy.

Because theatrical release followed by video and then television broadcast is an almost ironclad pattern in the film industry, ClickStar is likely to find it difficult to get the rights to release big-budget films before they appear on DVD, said Tom Adams, president of consulting firm Adams Media Research in Carmel, Calif.

“I see very little prospect of major studios adopting this soon,” Adams said. “You’re going to get resistance at every turn. It overturns an apple cart that’s been doing good business for 50 years.”

But, he said, “it may well be a nice model for getting independent films distributed.”

Leading movie-downloading services such as Movielink.com and CinemaNow.com offer older films no longer in theaters. The top five downloads at Movielink .com on Wednesday were “Suspect Zero,” “Bad Education,” “White Noise,” “Meet the Fockers” and “National Treasure.”

“Movielink’s not what we are at all,” Freeman said.

Executives from Movielink .com and major movie studios were unavailable for comment.

Intel plans to roll out similar services in television content, sports and games in the next several years, said Kevin Corbett, vice president of Intel’s digital home group.

He said the company would partner with content suppliers in each of those fields, just as it has paired with Revelations in the film venture.

Hofmeister reported from Sun Valley and Jones from San Francisco.